GOVERNMENT OF THE REPUBLIC OF NAMIBIA

New Partnership for

Africa’s Development (NEPAD) Food and Agriculture Organization

of the United Nations Comprehensive Africa Agriculture Development Programme (CAADP)

Investment Centre Division

GOVERNMENT OF THE REPUBLIC OF NAMIBIA

SUPPORT TO NEPAD–CAADP IMPLEMENTATION

TCP/NAM/2903 (I) (NEPAD Ref. 05/38 E)

Volume I of VII

NATIONAL MEDIUM TERM INVESTMENT PROGRAMME (NMTIP)

July 2005

NAMIBIA: Support to NEPAD–CAADP Implementation

Volume I: National Medium–Term Investment Programme (NMTIP)

Bankable Investment Project Profiles (BIPPs)

Volume II: Infrastructure Upgrade of Rural Water Supply

Volume III: Support to Smallholder Irrigation Schemes

Volume IV: Development of Infrastructure for Marketing Horticultural Produce

Volume V: Integrated Farming Support Programme for Resettled Farmers

Volume VI: Livestock Improvement

Volume VII: Support to Aquaculture Development

NAMIBIA:

NEPAD–CAADP National Medium–Term Investment Programme (NMTIP)

Table of Contents

Currency Equivalents .......................................................................................................................... iii

Abbreviations........................................................................................................................................ iii

Preface .....................................................................................................................................................1

I. INTRODUCTION........................................................................................................................3 A. The Economy......................................................................................................................3 B. The Agricultural and Rural Sector ..................................................................................4 C. The Strategic Framework ...............................................................................................10

(i) Government Objectives and Strategy .......................................................... 10 (ii) Donor Strategies .......................................................................................... 14 (iii) Project Pipeline............................................................................................ 15 (iv) Lessons Learnt............................................................................................. 19 (v) Conclusions ................................................................................................. 20

II. CONSTRAINTS AND OPPORTUNITIES .............................................................................20 A. Macro–economic ..............................................................................................................20 B. Natural Resource/Environmental ..................................................................................21 C. Crop Production ..............................................................................................................21 D. Livestock Production.......................................................................................................22 E. Marine and Inland Fisheries and Aquaculture.............................................................22 F. Institutional ......................................................................................................................22 G. Conclusions.......................................................................................................................23

III. INVESTMENT PROGRAMME OUTLINE...........................................................................24 A. Priority Setting.................................................................................................................24 B. Selection Criteria for Bankable Projects .......................................................................25 C. Identification of Projects for Development with FAO Assistance...............................26

IV. FINANCING GAP .....................................................................................................................27

V. MONITORING AND EVALUATION ....................................................................................28

ANNEXES Annex 1: Namibia Data Profile Annex 2: Ongoing Government and Partners Sector Investment Pipeline and Linkages to CAADP

A. Public Sector Investment Programme................................................................ 1 B. Projects Funded by GRN and Other Sources and Implemented by UN

Agencies ......................................................................................................... 8 Annex 3: Summary Outcome of National Stakeholders’ Validation Workshop Annex 4: List of References

NEPAD – Comprehensive Africa Agriculture Development Programme Namibia: National Medium–Term Investment Programme (NMTIP)

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Currency Equivalents (July 2005)

Local Currency = Namibian dollar (N$) US$1.00 = N$6.57 N$1.00 = US$0.15

Abbreviations

AA Aquaculture Act AALS Affirmative Action Loan Scheme ADB African Development Bank AGP Average Growth Period CAADP Comprehensive Africa Agriculture Development Programme CABLE Capacity Building for Local and Regional Authorities CBM Community Based Management CBNRM Community Based Natural Resource Management CBO Community Based Organization CBPP Contagious Bovine Pleuropneumonia COMESA Common Market for Eastern and Southern Africa DBN Development Bank of Namibia DBSA Development Bank of Southern Africa DCPs Development Cooperation Partners DRC Democratic Republic of Congo EC European Commission EDF European Development Fund EIB European Investment Bank EPZs Export Processing Zones EU European Union FAO Food and Agriculture Organization of the United Nations FIVIMS Food Insecurity and Vulnerability Information and Mapping System FMD Foot and Mouth Disease FSRE Farming Systems Research and Extension GDP Gross Domestic Product GRN Government of the Republic of Namibia GSIP Green Scheme Irrigation Policy GTZ Deutsche Gesellschaft für Technische Zusammenarbeit

(German Technical Agency for Development Cooperation) HIV/AIDS Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome HRD Human Resource Development IAEA International Atomic Energy Agency IFAD International Fund for Agricultural Development IFMS Integrated Financial Management System ILO International Labour Organization KfW Kreditanstalt für Wiederaufbau (German Bank for Reconstruction) LUX Luxembourg MAWF Ministry of Agriculture, Water and Forestry (since January 2005) MAWRD Ministry of Agriculture, Water and Rural Development (prior to January 2005) MEPR Monitoring, Evaluation and Progressing Reporting MET Ministry of Environment and Tourism


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MFMR Ministry of Fisheries and Marine Resources MLRR Ministry of Lands, Resettlement and Rehabilitation MRLGH Ministry of Regional and Local Government and Housing (prior to January 2005) MRLGHRD Ministry of Regional and Local Government and Housing and Rural Development

(since January 2005) MTEF Medium Term Expenditure Framework MTI Ministry of Trade and Industry MTP II Medium Term Plan on HIV/AIDS MWTC Ministry of Works, Transport and Communication NAP National Agricultural Policy NASSP National Agricultural Support Services Programme NCAs Northern Communal Areas NDC Namibia Development Cooperation NDP1 First National Development Plan NDP2 Second National Development Plan NEPAD New Partnership for Africa’s Development NGO Non Governmental Organization NHDI National Horticulture Development Initiative NOLIDEP Northern Regions Livestock Development Project NPRAP National Poverty Reduction Action Programme NRP National Resettlement Policy N–SIS North–South Incentive Scheme PPPUE Public and Private Partnerships for Urban Environment PPT Permanent Technical Team PSIP Public Sector Investment Programme RD Rural Development RD&PR Rural Development and Poverty Reduction SACU Southern African Customs Union SADC Southern African Development Community SARDEP Sustainable Animal and Range Development Programme SIDA Swedish International Development Agency SMEs Small and Medium Enterprises UN United Nations UNAM University of Namibia UNDP United Nations Development Programme UNESCO United Nations Education, Scientific and Cultural Organization UPA Urban and Peri–Urban Agriculture VCF Veterinary Cordon Fence WFP World Food Programme


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Preface

In an effort to halt and reverse the decline of the agricultural sector in the continent, the African ministers for agriculture unanimously adopted, at the 22nd FAO Regional Conference for Africa, held on 8 February 2002 in Cairo, a resolution laying down key steps to be taken in relation to agriculture in the framework of the New Partnership for Africa’s Development (NEPAD). As a follow–up to this resolution, they endorsed, on 9 June, 2002, the NEPAD Comprehensive African Agriculture Development Programme (CAADP). The recent Declaration on Agriculture and Food Security in Africa, ratified by the African Union Assembly of Heads of State and Government during its Second Ordinary Session, held in Maputo between 10 and 11 July 2003, provided strong political support to the CAADP. During this session, the Heads of State and Government agreed to adopt sound policies for agricultural and rural development, and committed themselves to allocating at least 10 percent of national budgetary resources for their implementation within five years.

The CAADP provides an integrated framework of development priorities aimed at restoring agricultural growth, rural development and food security in the African region. In its very essence, it seeks to implement the key recommendations on food security, poverty reduction and sustainable use of natural resources, made at recent global conferences. The CAADP comprises five pillars 1

1. Expansion of the area under sustainable land management and reliable water control systems;

2. Improvement of rural infrastructure and trade–related capacities for improved market access;

3. Enhancement of food supply and reduction of hunger;

4. Development of agricultural research, technological dissemination and adoption to sustain long–term productivity growth;

5. Sustainable development of livestock, fisheries and forestry resources.

As an immediate follow–up to the Maputo Declaration, representatives of 18 African ministries for agriculture from member countries of the NEPAD Implementation Committee, the NEPAD Steering Committee, the African Development Bank, the World Bank, the International Fund for Agricultural Development, the World Food Programme, FAO and civil society, participated in a meeting held in Rome on 17 September 2003, in order to discuss the implementation of the CAADP, and more specifically the:

• Methodology for the review/update of the national long–term food security and agricultural development strategies.

• Preparation of National Medium–Term Investment Programmes (NMTIPs).

• Formulation of the related “Bankable Investment Project Profiles” (BIPPs).

It is within this context that the Government of the Republic of Namibia (GRN), in an effort to reinforce its interventions aimed at fighting poverty and food insecurity, has requested FAO to assist in preparing a NMTIP and a portfolio of BIPPs, with the aim to:

• create an environment favourable to improved competitiveness of the agricultural and rural sector;

1 Pillar 5 was initially not part of CAADP, but has been added in recognition of the importance of the sub–

sectors.


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• achieve quantitative objectives and mobilize resources to the extent needed for the associated investment in agriculture;

• achieve the targeted allocation of national budgetary resources to this area, reflecting the commitment made in the Maputo Declaration; and

• create a framework for coordinated bilateral and multilateral financing of the sector.

The present NMTIP, which draws on work of the recent key strategy/policy documents notably the National Agricultural Policy (NAP), Second National Development Plan (NDP2) inclusive of the Public Sector Investment Programme (PSIP), National Poverty Reduction Action Programme (NPRAP), Medium Term Expenditure Framework (MTEF),Green Scheme Irrigation Policy (GSIP), National Horticulture Development Initiative (NHDI) and the Aquaculture Act (AA) all of which are intended to contribute to the Poverty Reduction Strategy Programme (PRSP). It was prepared by the Lead National Consultant2 under the overall supervision of the National Project Coordinator/NEPAD focal point in the Ministry of Agriculture Water and Forestry (MAWF)3 and in close collaboration with the NMTIP Core team of MAWF. The team was assisted by experts from the FAO Investment Centre Division4 while the Office of the FAO Representative provided crucial administrative support. In the process of preparing this document, participation was sought from major stakeholders from Government, development partners, private sector and civil society.

Key to the finalization of the NMTIP was the National Stakeholder Workshop held in Windhoek, on 2 February 2005, during which a draft of this document was discussed and validated, and project ideas for the BIPPs prioritized, based on agreed–upon selection criteria. Six of these were further developed into BIPPs that are presented in a separate document5. Lastly, the NMTIP and the BIPPs were reviewed by an FAO Virtual Task Force of technical experts.

This document starts with a brief description of Namibia’s agricultural sector in the context of the country’s economy and poverty and food security situation. This is followed by a review of national and development partner strategies and programmes, lessons learned, and an analysis of the principal constraints to, as well as opportunities for, the development of the sector. Based on this analysis and taking into account existing government strategies and the five pillars of CAADP, priority areas for investment have been identified. Finally, an attempt has been made to estimate the financing gap in terms of additional resources that would be required to meet the target of allocating 10 percent of national budget to the sector within 5 years, and a proposal put forward for monitoring and evaluation of the NMTIP implementation.

2 Prof. A.L. Abate, Animal Scientist. 3 Mr K. Kahuure, Permanent Secretary, Ministry of Agriculture, Water and Rural Development. 4 Mr G. Mashinkila, Economist, TCIS. 5 For the purposes of the present exercise, “Bankable Investment Project Profiles” are defined as documents

elaborated in a format and with the information that could make them favorably considered by the financial institutions, donors and private investors foreseen in the Maputo Declaration. These documents should enable cooperation partners to make preliminary indications of interest, and of approximate level of funding commitment. Further feasibility analysis and subsequent processing through the concerned partner(s) regular project formulation systems would follow to obtain a project/programme proposal elaborated to the feasibility study level.


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I. INTRODUCTION

A. The Economy

I.1. In economic terms Namibia is classified a middle–income country because of its relatively high per capita income estimated at US$2,471 in 2002. However, in reality an estimated 5 percent of the population receives five times the average income while over 50 percent live on approximately 10 percent of the national average. This makes the country to have one of the most skewed income distributions in the world; the Gini6 coefficient for Namibia is assessed at a very high of 0.7. About 76 percent of the households in Namibia live under the poverty line; poverty is more prevalent in rural areas where 70 percent of the population lives. Unemployment, estimated at 20 percent, remains one of the major challenges facing the Government of the Republic of Namibia (GRN). The population of the country is currently 1.83 million.

I.2. On average, the Gross Domestic Product (GDP) grew by 3.1 percent between 2000 and 2002 but is projected to achieve a growth rate of 3.8 percent in 2004. An annual economic growth of 5 percent per annum is considered by the GRN as the minimum desirable for reducing poverty in the country. The target set for the National Development Plan (NDP2) period is 4.3 percent, which is higher than the annual estimated population growth rate of 2.6 percent. In 2002, sector contribution to GDP was 15.0 percent by mining, 6.1 percent by agriculture including meat processing, 7.4 percent by fishing and fish processing and over 58.3 percent by the tertiary (services) sector. The agricultural sector is estimated to have contracted by 4.8 percent in 2003 mainly because of drought, falling beef prices and the appreciation of the Namibian dollar (N$). Mining remains the major source of foreign exchange earnings followed by processed fish and beef. Other important exports include agricultural products like table grapes and dates. Inflation is at its lowest since independence and averaged 7.3 percent in 2003.

I.3. Namibia’s economy is closely linked to that of South Africa from where most of its imports originate and to which most of its exports are destined, although Europe is increasingly becoming a leading market for fish and meat. The N$ is pegged at par to the South African rand and the country’s trade policies, exchange rate and monetary policies are regulated within the framework of the Southern African Customs Union (SACU) and the Common Monetary Area.

I.4. Total public expenditure in 2003/04 was about N$12.2bn or about 35 percent of the GDP up from about 34 percent in 2002/03. The higher expenditure is attributed to government personnel costs that increased by more than 10 percent in 2003/04 compared to 8 percent in 2002/03. Expenditure allocation to economic services increased from 7 percent in the previous year to a current level of 10.2 percent. The increase in allocation to economic services augurs well for the government’s intention of investing funds in sectors, which stimulate economic growth. Decline in revenue of diamond and other mining company taxes, as a result of the strengthening of the N$ against the US$, resulted in an estimated budget deficit of N$1.4bn or 4 percent of the GDP. In 2003, the N$ appreciated by 19.8 percent against the US$.

I.5. Mainly regular issues of treasury bills and bonds finance the deficit. However, a budgeting process set against a Medium Term Expenditure Framework (MTEF) has been in operation since the

6 The Gini coefficient is a measure of inequality developed to measure income inequality but can also be used

to measure any form of uneven distribution. The coefficient is a number between 0 and 1, where 0 corresponds with perfect equality (where everyone has the same income) and 1 corresponds with perfect inequality.


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fiscal years 2001/02–2003/04 to control increases in planned spending more effectively and reduce the budget deficit.

I.6. Total external debt expanded by 8.3 percent to N$1.6bn between 2002 and 2003. The expansion was due to disbursements by some creditors notably the African Development Bank (ADB) for the Northern Railway Extension, the European Investment Bank (EIB) for the Private Sector Global Loan II and the Development Bank of Southern Africa (DBSA) for the Windhoek Urban Infrastructure Project. As a ratio of GDP, external debt was 4.6 percent. Bilateral creditors, such as the KfW of Germany dominated the composition of the external debt accounting for 56.1 percent of the envelope while loans from multilateral creditors, such as the ADB, accounted for the remaining 43.9 percent.

I.7. Recent important economic events include the exploration for gas and the establishment of the Kudu Gas project, which is intended to attract funding and start commercial gas production in the nearest future. The contribution of the mining sector to the economy is also set to increase after the establishment of the Oranjemund offshore diamond mines and the launching of the Skorpion zinc mine in 2001. In order to promote the manufacturing sector, government adopted an Export Processing Zone policy, which provides significant tax exemptions and concessions to companies that export outside the SACU countries and several budgetary and financial reforms have also been put in place. The State Finance Act of 1991 is being revised to provide clarity on roles and responsibilities as well as a clear legal and administrative framework for fiscal management. An Integrated Financial Management System (IFMS) is being developed so as to improve the availability of accurate and timely government financial reports and curb overspending. Government is also introducing a Sovereign Debt Management Strategy whose objective is to ensure that the national debt remains affordable and low. The Development Bank of Namibia (DBN), established to provide capital to entrepreneurs and to stimulate industrial and economic development was launched in April 2004.

B. The Agricultural and Rural Sector

I.8. Structure. Namibia occupies a land area of 824,269 km2. Ecologically, 22 percent of the country is desert and receives a mean annual rainfall of less than 100 mm; 33 percent is arid with a mean annual rainfall of between 100 and 200 mm; 37 percent is semi arid and receives between 300 and 500 mm of rain annually; and 8 percent is semi–humid to sub–tropical with a mean annual rainfall of between 500 and 700 mm. More recently, the agrarian structure of the country has been divided into 11 agro–ecological zones defined by Average Growth Period (AGP) in days, as indicated in Table 1 on next page.

I.9. The agricultural sector is characterized by a dual system comprising a well developed, capital intensive and export oriented commercial sub–sector and a subsistence–based communal farming sub–sector, low in technology and external inputs and highly dependent on labour.

I.10. The main activity in the commercial sub–sector is cattle ranching, with limited areas of cropping, carried out in free–hold farms covering about 52 percent of the country’s landmass or about 36.2 million ha. There are an estimated 4 200 commercial farmers each owning, on average, about 8,620 ha south of the Veterinary Cordon Fence (VCF). The sub–sector employs about 35,000 farm workers equivalent to supporting about 150 000 people including dependents.

I.11. On the other hand, the communal farming sub–sector occupies about 43 percent of the country (about 34 million ha) mainly in the north and northeast. While livestock production is generally acknowledged as the most important activity in communal areas, the importance of staple


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cereal crops is underscored. There are approximately 150,000 communal farming families representing some 900,000 people or 95 percent of the farming population. There is no private ownership of land in communal areas and all land belongs to the state. Customary rules governing tenure rights over grazing land are vested in traditional authorities that also allocate land for cropping at present estimated at 2 ha per household.

Table 1: Agro–ecological Zones Agro–ecological Zone AGP Suitability for agriculture Central Plateau 8–83 days For sheep grazing only Damaraland 8–25 days For sheep grazing only Escarpment 8–15 days For cattle and sheep grazing Ekuma Plains & Etosha Pan 63 days Suitable for cattle grazing River Canyons 0–15 days Not applicable agriculturally Kalahari Sands Plateau 25–135 days Suitable for cattle and sheep grazing and mixed cropping in floodplains

of river systems Kalkveld 48–105 days Suitable for cattle grazing and short maturing crops in places Kaokoland 8–63 days Mainly suitable for cattle and sheep grazing Namib Sand Sea/Coastal Plains 0 Unsuitable for grazing Namib Desert Plains 0–35 days Unsuitable for grazing Undifferentiated rocky hills& inselberg

mountains 0 Not applicable agriculturally

I.12. Low and sometimes poorly distributed rainfall have limited rain fed crop production to only those areas receiving 400 mm and above annually or about 34 percent of the country. Such production is, however, associated with a high risk of crop failure due to the erratic nature of the rainfall. Contribution of crops to total agricultural output was 14.6 percent in 2001 declining to 8.5 percent in 2002 due to drought. Of the cereals, a large amount of the rain–fed maize is produced in the commercial sector while pearl millet or mahangu and to a small extent sorghum is almost exclusively grown by an estimated 150,000 subsistence communal farmers mainly for their own consumption. Very limited irrigation (about 7,000 ha) is practiced in the maize triangle and in Namibia Development Cooperation (NDC) schemes in Kavango region and along the Kunene river in the far northwest to produce maize. In the south, the Hardap irrigation scheme produces a winter wheat crop and some table grapes and dates, which have boosted the volume growth of commercial crops.

I.13. The volume of crop production fluctuates widely depending on the rainfall pattern. Total coarse grain production for the 2000/01, 2001/02, 2002/03 and 2003/04 seasons was 92,200; 64,200; 91,100 and 124,000 mt respectively. The national coarse grain production is deemed normal at about 100,000 mt or above. Such levels of output happen only in drought free years and are only enough to meet about 70 percent of national requirements and the deficit of about 30 percent has to be imported. In 2003/04 total cereal imports were made up of 107,500 mt of white maize and 75,200 mt of wheat. For 2004/05 total supply is forecast at 134,500 mt made up of 21,700; 49,600 and 96,200 mt of wheat, maize and millet/sorghum, respectively. This is against a domestic demand of respectively 61,500 mt 160,000 and 96,200 mt and gives a shortfall of 39,800 mt of wheat and 110,000 mt of maize to be covered by imports.

I.14. Crop production under irrigation is set to increase once the Green Scheme initiative of the Ministry of Agriculture, Water and Forestry (MAWF) becomes operational. The main objectives of the Green Scheme include: promoting the NDP objectives of achieving household food security and nutrition etc.; encouraging the use of cost–efficient irrigation methods; encouraging private sector involvement and stimulating public–private partnerships in irrigation; achieving the social development and upliftment of communities located within suitable irrigation areas; and facilitating


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the empowerment of small–scale irrigation farmers. The Scheme’s strategy for government to facilitate the establishment of a favourable, commercially viable environment, which will stimulate private investment and subsequently local employment creation and encourage development of small–scale irrigation farmer settlements. The target group consists of the low income earner, unemployed or underemployed, previously disadvantaged group member, who has some agricultural knowledge and experience and who has sufficient understanding of the responsibilities and obligations attached to the concept of self–sustainability as a self employed irrigation farmer.

I.15. Livestock production predominates in both the commercial and communal sectors. Its share of agricultural output stood at a high of 79 percent in 2002. After a while, the trend has shown a decline in commercial livestock numbers and an increase in communal numbers. Price declines and competition in the sector has forced farmers out of pig production resulting in marked reductions in pig numbers. Volume fluctuations in cattle and sheep are probably more drought related than indicative of structural changes. There is also a growing interest in game ranching, wild life viewing, trophy hunting and operation of tourist guest facilities among commercial farmers at the expense of livestock ranching. In the communal sector, improved livestock services coupled with low–level off–take (about 7–8 percent for cattle and 25–30 percent for small stock) have resulted in rapid increases in animal populations despite the occurrence of intermittent droughts.

I.16. Cattle numbers have increased from 2.1 in 1993 to 2.5 million in 2001 but have since declined to a 2002 estimate of 2.3 million. The communal cattle population outstripped commercial numbers in 1995 (Agricultural Statistics Bulletin, 1993–2002), steadily increased to 1.7 million in 2000 but has fallen to 1.5 million head or about 63 percent of total against 858,391 animals in the commercial sector.

I.17. The country’s sheep population declined from 2.7 million in 1993 to a low of 2.1 million in 1998 but increased to 2.8 million in 2002. Commercial sheep production was 2.4 million in 2002 compared to 374,852 animals from the communal sector.

I.18. The goat population in Namibia increased by about 34 percent from 1.6 million in 1993 to 2.1 million in 2002 due to an increase in the number of Boer and indigenous goats farmed. The number of Angora goats drastically fell from 12,188 to 4,291 in the same period. In 2002 the about 1.5 million goats found in communal areas were more than double the 608,313 animals on commercial farms.

I.19. Between 1993 and 2002 pig numbers more than doubled from 20,065 to 47,805. In the same period, numbers in commercial farms declined from 8,520 to 6,825 while those on communal farms increased from 11,545 to 40,980.

I.20. Ostrich numbers have increased from 15,191 in 1993 to 62,976 in 2002. The industry is dominated by the commercial sector where in 2001, 58,550 ostriches or about 93 percent of total are to be found with the remaining 4,426 (7 percent) being contributed by communal farmers in the south of the country. The poultry population has almost doubled increased from 461,078 in 1993 to 883,950 in 2002. The distribution by farming sector is not available.

I.21. Namibia exports some 80 percent of its livestock production mainly to South Africa and the European Union with the commercial sector contributing over 90 percent of the total exports. This advantage is likely to be eroded as regional trade integration progresses through SADC and international markets. Notwithstanding this proviso, there is need to improve the communal areas’ share of the export market. Essential interventions should include, improving quality through better animal production practices, stimulating demand in local markets, improving marketing infrastructure


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and funding the cost of compliances with the veterinary conditions that are critical to accessing major export markets. At present, it a requirement for communal farmers wishing to market livestock formally to first place their animals in quarantine camps for three weeks. Many farmers do not enjoy the facilities because existing camps are located far away from major production areas. There is need, therefore, to create camps at distances that can be covered at reasonable cost to the farmer. The control of the scheduled diseases Contagious Bovine Pleuropneumonia (CBPP) and Foot and Mouth Disease (FMD) in the north of the country also requires tackling through an international strategy that should involve neighbouring countries in a cross–border investment venture.

I.22. Uncontrolled off–shore fishing, particularly, by foreign vessels reduced from 7.9 percent in 1993 to 5.8 percent in 1996 the percentage contribution of fishing and fish processing to GDP. Introduction of a policy of control on the amount of annual catches saw the industry recover to contribute 7.8 percent to gross domestic output in 2000. This, however, dropped in the following year to 6.2 percent. The GRN is also encouraging development of aquaculture through private investment for export purposes and as a way of contributing to incomes of inland smallholders. It is estimated that some 100,000 people, in Namibia, derive part of their livelihood from seasonal fishing. In the longer term, inland fishery is expected to also contribute to export earnings.

I.23. Share of GDP. Agriculture is the main source of livelihood for about 70 percent of the population who live in rural areas in the densely populated and poorest northern parts of the country. It was negatively affected by drought and falling beef prices in 2003, while the effect of exchange rate fluctuations impacted negatively on meat exports. Although growth in the sector has been at a slow rate of 2.2 percent per annum, agriculture still provides most employment in the country estimated at 29 percent in 2000. In 2002, commercial farming contributed 4 percent GDP or 81 percent of the agricultural output while the subsistence sector’s share was 2 percent of GDP or 17 percent of total agricultural output.

I.24. A willing–buyer willing–seller principle agreed upon immediately after Independence, to promote land distribution to the indigenous majority of Namibians, has been criticized by government for being slow because of high land prices and the unavailability of productive land (Sherbourne, 2004). Since then, the GRN has introduced new schemes and programmes to accelerate the process. These include: (a) The Affirmative Action Loan Scheme (AALS) of 1992 whose objective is to assist farmers with large herds purchase land holdings in the commercial farming area; (b) The North–South Incentive Scheme (N–SIS) of 1999 aims at assisting farmers north of the VCF to dispose their cattle through slaughtering at a registered abattoir and/or a recognized abattoir entrepreneur and to use the money to resettle on farms in the south. The above schemes support a land distribution approach based on property rights and individual choice, responsibility and incentives. Between 1995 and 2003, the AALS scheme resulted in 2.7 million ha being redistributed into the hands of previously disadvantaged Namibians.

I.25. The legal framework for the state to acquire land for allocation to landless Namibians or to those citizens without adequate agricultural land is to be found in The Agricultural (Commercial) Land Reform Act of 1995. During a Cabinet Retreat in December 2000, President Sam Nujoma announced a government plan to acquire 9.5 million ha of land for redistribution and resettlement at a cost of N$1bn. Under this plan there is to be a National Land Use Policy for Namibia, which will allow for the creation of a Land Acquisition and Development Fund to be managed by a Land Advisory Commission. In addition, the plan provides for the establishment of a Land Information System and a Land Taxation System.

I.26. In 2001, the Ministry of Lands, Resettlement and Rehabilitation (MLRR) published the National Resettlement Policy (NRP) White Paper, which contains procedures for identifying


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prospective settlers, and for supporting settlers once they have resettled. Resettled people do not own the land they farm and share facilities and resources with other settlers. From 1996/97 to 2002/03, government allocated N$20m a year for the purchase of commercial land for resettlement purposes and by 2002 N$100m had been spent on acquiring 102 farms with a total of 599,770 ha. The number of families resettled by 2002 was 29,800 of which 1,160 were on commercial farmland. The effect on the agricultural position of the resettled farms has not been quantified. However, resettled families are given breeding livestock and provided with irrigation facilities for the growing of vegetables for home consumption and also for sale.

I.27. The current thrust of the resettlement programme is to spend N$50m annually on land purchases. In addition, a Permanent Technical Team (PTT), inaugurated in mid 2003, is formulating a Plan of Action for dealing with the Land Reform Programme in the context of existing laws and regulations such as the willing–seller/willing–buyer principle. The PTT is also to specify means of attracting donor funding for the implementation process.

I.28. The Communal Land Bill, which has been under discussion since 1995, has finally been promulgated into law as the Agricultural (Communal) Land Reform Act of 2002. Access to land, which is crucial to reducing rural poverty, is guaranteed under this act. Women, for example, now have equality with men when applying for communal land rights; the rights of widows to access their deceased spouses’ rights to communal land are also protected. In dealing with rights of leasehold to be offered by Communal Land Boards, the Act is likely to promote rural development because it has made it attractive to invest in land improvement and in its sustainable use. The Act also makes fencing by any person or on any portion of land situated within a communal land illegal unless otherwise authorized through a government gazette notice.

I.29. Main agricultural development institutions. The administration of the agricultural sector activities in the economy of Namibia is managed by the line ministries listed below:

• The MAWRD is tasked with the responsibility of coordinating the implementation of the National Agricultural Policy;

• The MLRR coordinates land distribution, social reintegration and the resettlement of disadvantaged Namibians;

• The Ministry of Environment and Tourism (MET) through its directorates of environmental affairs and is concerned with environment–related issues including the promotion of community–based natural resource management;

• The Ministry of Regional and Local Government and Housing (MRLGH) oversees the implementation of the decentralization policy;

• The Ministry of Fisheries and Marine Resources (MFMR) is the lead agency for fisheries and aquaculture and has recognized the potential role of aquaculture in rural development; and

• The Ministry of Trade and Industry (MTI) supports agriculture related activities in its capacity as the line ministry responsible for development of Small and Medium Enterprises (SMEs);

• The mandate of providing an adequate network of rural roads rests with the directorate of Transport in the Ministry of Works, Transport and Communications (MWTC).


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I.30. A number of statutory boards facilitate and support agricultural sector activities administered within the various government ministries. The Agri–bank of Namibia offers loans that add real enterprise value to the agricultural sector for socio–economic development. The objective of the Meat Board of Namibia is to develop strong markets for the meat industry and match consumer requirements with supplier capabilities. Meatco is the main channel for the formal marketing of beef in Namibia. The Karakul Board was set up with similar objectives relating to the marketing of pelts. Two major unions safeguard the interests of farmers: the Namibia Agricultural Union for commercial farmers and the Namibia National Farmers Union for communal farmers.

I.31. Financing. Table 2 below shows government budget allocations to agriculture and related rural development against total annual budget. For purposes of calculating the agricultural sector budget the following budget components were used: (i) all recurrent/capital budgets of the MAWF; (ii) budgets of portions7 of the capital/recurrent expenses specifically related to agriculture activities in the following ministries: MET (100 percent); MFMR(100 percent); MLRR (100 percent); MRLGH (20 percent); MIT (10 percent); and MWTC (50 percent).

Table 2: Agricultural Sector Allocation against Total Annual Government Budget Expenditure (in N$ million) Actual Projected

Item 00/01 01/02 02/03 03/04 04/05 05/06 06/07 Total annual government budget 8,447 10,302 11,399 12,243 12,690 12,474 12,978 Growth in budget (%) 18.0 9.6 7.0 3.7 -1.7 4.0 Total agricultural sector budget 908 783 798 849 876 923 1,168 – MAWRD budget (1) 459 386 387 410 426 454 580 – MET budget (2) 59 60 65 69 71 72 73 – MFMR budget (3) 82 83 83 89 95 107 132 – MLRR budget (4) 76 49 51 56 56 57 128 – MIT budget (5) 9 7 7 7 7 7 7 – MWTC budget (6) 154 131 132 140 146 150 155 – MRLGH budget (7) 69 67 73 78 75 76 93

Agriculture budget as % of total budget 10.7 7.6 7.0 6.9 6.9 7.4 9.0 Growth in agricultural sector (%) -13.7 1.9 6.2 3.4 4.2 28.1 Source: Computed from GRN Budget Statements 2000–2004: Ministry of Finance. (1) 100 percent of the MAWF is expended on agriculture and rural development. (2) It is assumed that only 50 percent of the MET budget is the portion expended on agriculture and rural development. (3) 100 percent of the MFMR is expended on agriculture and rural development. (4) 100 percent of the MLRR budget on agriculture and rural development. (5) Only 10 percent of the MIT budget is assumed to be expended on agriculture and rural development. (6) Only 50 percent of the MWTC budget is assumed to be expended on agriculture and rural development. (7) Only 20 percent of the MRLGH budget is assumed to be expended on agriculture and rural development.

7 The proportions are assumed as a percent that can be attributed to agriculture-related expenditure activities in

the concerned ministries.


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C. The Strategic Framework

(i) Government Objectives and Strategy

I.32. The agricultural sector overall objective as defined in the NDP2 Mission Statement for the sector is to contribute to the improvement of levels of household and national food security, and to create employment opportunities. According to NDP2 this mission is to be accomplished through achieving the following immediate objectives:

• Increase agricultural production at national and household levels;

• Improve the agricultural balance of trade by raising the volume and value of agricultural exports and reducing those of imports;

• Promote complementary farmer livelihood opportunities; and

• Increase the in–country value added to agricultural output.

I.33. In addition to the sector objectives spelled out in NDP2, Namibia’s agricultural development is also guided by the National Agricultural Policy of 1995 the objectives of which are:

• Achieve growth rates and stability in farm incomes, agricultural productivity and production levels that are higher than the population growth rate;

• Ensure food security and improve nutritional status;

• Create and sustain viable livelihood and employment opportunities in rural areas;

• Improve the profitability of agriculture and increase investment in agriculture;

• Contribute towards the improvement of the balance of payments;

• Expand vertical integration and domestic value added for agricultural products;

• Promote the sustainable utilization of the nation’s land and other natural resources; and

• Contribute to balanced regional rural development based on comparative advantage.

I.34. These objectives are to be pursued through the following strategies as proposed in a 2003 review of the National Agricultural Policy:

• The role of government is to create enabling macro–economic and institutional setting;

• Refocus government support towards communal area farmers and vulnerable groups;

• Free market environment and border/opportunity cost pricing;

• Diversification to non–traditional crops and value adding;

• Human resource development (HRD);

• Privatization of support services to farmers; and

• Community/farmer participation in resources management.


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I.35. In the long term, the agricultural sector’s vision is to modernize agriculture in line with the country’s Vision 2030. Specific strategies highlighted include:

• The translocation of the VCF and hence the integration of domestic livestock markets;

• The cultivation of high value crops;

• Improved value adding to meat products; and

• The adoption of integrated pest management strategies.

I.36. Specific sub–sector policies are also in place viz:

• The Namibia National Water Policy White Paper of 2000 aims at achieving equitable access to, and the sustainable development, of freshwater resources by all sections of the population especially the rural and urban poor, in order to promote long–term social and economic development;

• The Crop Diversification Policy encourages the growing of high–valued crops with potential to add to the export market or to reduce the volume and value of agricultural imports. Non–traditional crops such as sweet potatoes, table grapes, dates, groundnuts and oriental tobacco have shown promise. Lucerne production, very valuable for the livestock industry, has increased both in quantity and value;

• A Cotton Development Plan (2000) approved by government aims to increase production of cotton from the present of about 4,400 tonnes to a targeted 15,000 tonnes in the medium term to justify the construction of a ginnery. A feasibility study has also been completed for irrigated agricultural production on a 10,000 ha farm in Caprivi region;

• The National Drought Policy (1995/96), currently being updated, was developed to reduce excessive government expenditure on relief programmes during periods of drought. A Drought Fund established as a result of the policy has shifted the responsibilities for tackling drought away from government to farmers through adoption of survival strategies;

• The Cooperative Act of 1996 has provided a mandate to the MAWF to promote development of the cooperative movement. The Multipurpose Cooperatives are relevant to the farming community because they provide for the following components: savings and credits; agricultural inputs supply and farm produce marketing; and consumer goods supply;

• The National Horticulture Development Initiative (2002) is to promote increased local production and marketing of fruit and vegetables and other horticultural products;

• The Mahangu and Sorghum Action Plans, updated in 2004 have similar objectives of production and marketing;

• The National Small Stock Development Plan (2004) is a coordinated approach to the development of the small stock sector in such a way as to increase its contribution to national agricultural output, agricultural value added and improved balance of trade; and

• Namibia’s unique biodiversity is to be exploited by implementing the Indigenous Plants Development Strategy of 2003.


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I.37. As its contribution to the agricultural and rural sector, the MFMR aims to promote inland fisheries in order to provide food security for Namibians.

I.38. In the MET, the relevant objectives include the following:

• To encourage the development of appropriate wildlife– and forestry–based industries;

• To initiate and/or participate in all land–use planning with regard to natural resources and management of community–based conservation and development programmes; and

• To initiate and/or participate in the development of the natural resource–base and methods of utilization so that people obtain the maximum sustainable benefits. For example, the conservancy programme aims to improve livelihoods through the sustainable consumptive and non–consumptive use of wildlife resources.

I.39. The MLRR has set itself the following objectives:

• To implement land reform policies and legislation; and

• To facilitate integrated land use planning and local resource control

I.40. The main objectives of the MRLGH include:

• Proclaiming towns and villages and declare additional settlement areas in response to identified needs such as poverty reduction;

• Improving the delivery capacity of regional, local and traditional authorities; and

• Enhancing and maximize citizen and stakeholder involvement and participation in local economic development.

I.41. The contribution of the MTI is through the following objectives:

• To facilitate an stimulate economic growth and development

• To create jobs, and thereby

• To reduce poverty and alleviate inequity

I.42. In the MWTC, the following objectives are relevant:

• To ensure and sustain adequate development of roads network by providing, maintaining and improving all roads including primary, secondary, tertiary and urban roads;

• Promote the development of a strong and competitive commercial transport industry which provides effective transport services; and

• To provide all regions with adequate access to transport infrastructure that will stimulate local development.

I.43. Other policies with direct influence on agricultural development include the Foreign Investment Act (1996), the Gender Policy (1997), the Desertification Policy (see NDP2 viol’s), the Poverty Reduction Strategy (1998) and the Forest Policy (1998).


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I.44. The allocation to all the seven ministries engaged in the agricultural and rural development activities can be considered to be the share of budget spent on agriculture and rural development (see percent allocations in Table 2 above). For the past three years allocation to agriculture and related activities have averaged to 7 percent of the national budgets in the past three years and it is expected to reach the 10 percent allocation by 2008/2009 as indicated in Table 8 on page 28.

I.45. In Namibia, poverty is concentrated among groups, which historically have been disadvantaged. It is disproportionately to be found among rural people, especially those in remote locations and is a major constraint to the country’s economic development. Poverty reduction, therefore, became a key government strategy for development as highlighted in both NDP1 and NDP2. The challenges and approaches needed to reduce poverty are so cross–cutting that government saw it necessary to formulate a Poverty Reduction Strategy in 1998 to provide an integrated approach to the problem. The strategy concerns itself with the following three areas: (a) how to foster more equitable and efficient delivery of public services (in the context of Namibia’s commitment to regional decentralization) for poverty reduction countrywide; (b) how to accelerate equitable agricultural expansion, including consideration of food security and other crop development options and (c) options for non agricultural economic empowerment, including an emphasis on the informal sector and self – employment options. In the short– to medium–term the strategy focuses on income generation (based on agriculture, tourism and SMEs) and safety nets (through labour intensive works and grant–based transfer programmes). A National Poverty Reduction Action Programme: 2001–2005 has been completed the major focus area of which is the re–orientation of the various arms of government to become more engaged in a holistic and synergistic response to the social and economic requirements to reduce poverty. The specific role of agriculture in this programme is to strengthen and diversify the agricultural base on which many poor rural communities rely through measures that diversify and improve agricultural production, thereby making individual and family livelihoods more resilient to seasonal, environmental and economic changes.

I.46. HIV/AIDS. The epidemic is a severe development challenge to Namibia and has been recognized as such by the political leadership and civil society. Provisionally, a national 2002 HIV prevalence rate among pregnant women of 23.3 percent has been established rising to as high as 43 percent in the north east of the country. Over 50,000 people have already died of AIDS, 230,000 adults and children are living with HIV/AIDS and over 82,000 children have been orphaned due to AIDS. In the agricultural sector the effect of HIV/AIDS is to be seen in reduced labour input on various farm enterprises and operations. The broad objectives of the Medium Term Plan on HIV/AIDS (MTP II) in Namibia include:

• Reducing the number of HIV infections through the strengthening of support to Preventive measures;

• Ensuring that all Namibians living with HIV and their families have access to services that are affordable, of high quality and responsive to their needs;

• Empowering individuals, families and community members with knowledge and skills related prevention, home–based care and sell–protection against HIV/AIDS infection;

• Ensuring that all Namibians living with HIV and their families are not subjected to any form of discrimination;

• Establishing national and regional programme management structures for the co–ordination and monitoring of the implementation of the national response; and


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• Ensuring continuous support by both national and international communities in order to address the socio–economic impact of HIV/AIDS.

I.47. As strategies for achieving the above objectives MTP II has focused on:

• Social mobilization;

• Prevention;

• Access to services;

• Prevention of discrimination;

• Policy development;

• Programme development and management; and

• Capacity building through human resource development.

I.48. Overarching strategies. The Farming Systems Research and Extension (FSRE) programme is a strategy that provides direct research, extension, training and veterinary support services in response to the needs of farmers and uses participatory methods in the planning, implementation and monitoring and evaluation of such services. FSRE has been adopted in agriculture, as a way of responding to community needs at reduced cost and with minimum overlaps or duplication by government and other stakeholders. The Food Security and Nutrition Action Plan was launched in 1995 and updated in 1999.

I.49. Its overall objective is to reduce vulnerability to food insecurity and malnutrition over the medium– to long–term through local participation in development initiatives. The Community Based Natural Resources Management Strategy seeks to empower communities to manage their agricultural, water and other natural resources in a sustainable manner. The Rural Poverty Reduction Support Programme is to be implemented in 2005; its stated purpose is to increase sustainable economic activity amongst the rural poor by creating an enabling framework.

(ii) Donor Strategies

I.50. The agricultural policy advocates broad partnership with other stakeholders including the international community whose strategies in assisting the GRN may be summarized as follows:

• Maximizing agricultural returns and efficiencies as well as diversifying sources of Rural income, while ensuring the sustainable utilization and management of the natural resource base in areas where the majority of the poor reside; and

• Developing a human resource capacity that will strengthen existing and create new planning, coordinating and monitoring systems at local, regional and national levels, in the areas of poverty reduction, agriculture including water development, environment, land reform and HIV/AIDS as a cross cutting issue.

I.51. Partnership Forum on HIV/AIDS. The Partnership Forum, which is convened by the UN theme group on HIV/AIDS, consists of members from the embassies, high commissions and agencies represented in Namibia that are supporting or wish to support HIV/AIDS related activities. The Forum supports initiatives of the farming sector launched through the Ministry of Labour and some regional Governors in spearheading support to Community Based Organizations (CBOs) in the fight against HIV/AIDS. It contributes funds to a common pool, which is administered by the United Nations


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Development Programme (UNDP) and extended as small grants to CBOs and Non Governmental Organizations (NGOs) in the regions to execute HIV/AIDS related activities, which among many include income generation and education.

(iii) Project Pipeline

I.52. The project pipeline has considered ongoing and planned programmes and projects in the NDP2 period of 2001/02 to 2005/06. For the agricultural sector, tabulation is provided in Annex 1, section A1 and A2 for government and section B for international agencies/donors to show the linkages to the five pillars of CAADP.8

I.53. Public Sector Investment Programme (PSIP). The PSIP shows how government development expenditure is geared towards the implementation of specified policies and strategies for the attainment of development goals. It provides information for the deployment of external support and on programmes that have been identified but have no funding. It is also a tool for the analysis, programming and review of inter– and intra–sectoral allocation of development resources.

I.54. At the start of NDP2 the PSIP had altogether 22 programmes in the agricultural and rural development sector. The list has been revised to 18 programmes in the review of the NDP2 and now consists of 224 projects (Annex 1, A2). Ten of the 22 programmes are related to agriculture, food security and nutrition. They are concerned with research, production, infrastructure development, rural livelihood support, natural resources management, capacity building, trade related issues, irrigation schemes, etc. The NDP2 allocation for these programmes is given in Table 3 below:

Table 3: Agriculture, Food Security and Nutrition Programmes in NDP2 No. Programme NDP2

Allocation 1 Farming systems research and extension 106,784 2 Support to crops and livestock production diversification 145,924 3 Support to marketing, trade and post–harvest operations 12,750 4 Agricultural services and services reform 53,749 5 Agricultural and micro–finance schemes 183,641 6 Agricultural information system 9,004 7 Strengthening human resources and institutional capacity 54,500 8 Protection and quality assurance and safety 4,924 9 Support to food security 302,090

10 Development of MAWF 78,534 Total Agriculture, Food Security and Nutrition 951,900

I.55. The 12 programmes under water resources and rural water supply in the NDP2 have been reduced to 8 in the NDP2 Mid Term Review (MTR) The projects in these programmes concern themselves with ground and surface water development and control, pipeline installation and rehabilitation, capacity building and implementation of CBM and decentralization policies. Table 4 shows the revised planned expenditure in this investment area.

8 See Preface.


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Table 4: Water Resources and Rural Water Supply Programmes (Revised NDP2 MTR List) No. Programme NDP2 MTR

Allocation (N$ ´000)

1 Resource assessment and monitoring 133,053 2 Resource management 60,270 3 Institutional Improvements 6,900 4 Legislation development 2,640 5 Capacity building 1,350 6 Rural development programme 437,649 7 Implementation of CBM 286,383 8 Implementation of decentralization policy by providing new office facilities 87,610

Total Water Resources and Rural Water Supply 1,015,855

I.56. The NDP2 PSIP provides for total budget allocations of N$952m to the Agriculture, Food Security and Nutrition sub–sector and a revised NDP2 MTR sum of N$1bn to the Water Resources and Rural Water Supply sub–sector. These include funding from the State Revenue Fund, outside it and amounts to be funded. Tables 5 and 6 below show the breakdown in percentages of the total NDP2 budget.

Table 5: PSIP Budget for Agriculture, Food Security and Nutrition in NDP2 Funding Category Total Budget

(N$ ‘000) Agriculture,

Food Security and Nutrition Budget

% Total

Total 17,960,034 951,900 5 Inside State Revenue Fund 8,301,035 806,483 10 Outside State Revenue Fund 1,105,357 87,102 8 To be funded 8,553,642 58,315 0.7

Table 6: PSIP Budget for Water Resources and Rural Water Supply Programmes in NDP2

(Revised MTR List) Funding Category Total Budget

(N$ ‘000) Agriculture,

Food Security and Nutrition Budget

% Total

Total 17,960,034 1,015,855 6 Inside State Revenue Fund 8,301,035 427,841 5 Outside State Revenue Fund 1,105,357 84,166 8 To be funded 8,553,642 503,848 6

I.57. In addition, there are programmes and projects that impact on agriculture and rural development but are implemented in ministries like Ministry of Regional and Local Government and Housing (MRLGH), Ministry of Lands, Resettlement and Rehabilitation (MLRR), Ministry of Environment and Tourism (MET), Ministry of Fisheries and Marine Resources (MFMR) and Ministry of Trade and Industry (MTI). The areas covered include land reform, resettlement, afforestation and forest rehabilitation, community forest management and utilization, environmental awareness and control, tourism infrastructure development, wildlife and community conservancy development, natural resource management, SME cottage industry development and regional councils support. It is evident that there is some duplication of efforts and hence potential inefficient use of resources in national programme implementation. These programmes are listed below in Table 7.


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Table 7: NDP2 Programmes of Relevance to Agriculture and Rural Development Sector Implemented in Other Ministries

No. Sub–sector (Implementing Ministry) Programme

NDP2 All. (N$ ´000)

I. Fisheries and Marine Resources Programmes (MFMR) 1 Fisheries surveillance and development 288,761 2 Freshwater fisheries extension and development 3,800 3 Aquaculture 14,224

Total 306,785 II. Land Reform and Resettlement Programmes (MLRR)

1 Development of communal land 2,702 2 Ongoing resettlement projects 9,500 3 New resettlement projects 8,910 4 Land reform programme 100,910 5 Survey and Mapping 134,778

Total 256,800 III. Forestry Programmes (MET)

1 Afforestation and forest rehabilitation 1,722 2 Forest research and information programme 5,400 3 Promote forest based industry and forest products 600 4 Support to forestry programme 53,816 5 Community based forest management 26,880 6 Community forest management and utilisation 6,385 7 Community timber utilization 1,500 8 Charcoal industry promotion 1,850 9 Sustainable income generating of community projects 400

10 Environmental monitoring and data collection 780 11 Environmental awareness and control 910 12 Development and training of community skills 2,900 13 Farm forest promotion 250

Total 103,393 IV. Tourism Programmes (MET)

1 Tourism infrastructure development 201,549 2 Tourism protection programme 250 3 Implementation of northwest tourism plan 1,450 4 Community conservancy development 17,500

Total 220,749 V. Wildlife Programmes (MET)

1 Improve biodiversity conservation sustainable use of renewable natural resources 7,448 2 Improve natural resource management to effectively prevent wildlife crime 2,875 3 Wildlife development and conservancies establishment 16,750 4 Natural Resource Management 14,500 5 Khaudum tourist and hunting camp 3,450

Total 45,020 VI. Trade and Industry Programmes (MTI)

1 Vendor development programme 11,996 2 SME sourcing programme 11,596 3 SME training project and development 67,711 4 Open market establishment programme 15,000

Total 106,303 VII. Regional and Local Government Programmes (MRLGH)

1 Planning and surveying 62,300 2 Regional councils support 64,104 3 Regional and local government programmes 126,404

Total 252,808


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I.58. Donor ongoing and pipeline projects. Early in 2003, the GRN and its Development Cooperation Partners (DCPs) met in Swakopmund, Namibia to discuss the NDP2. The specific objectives of the Second Round Table Conference included: validation of the commitments as per existing bilateral and multilateral arrangements already in the PSIP; (i) to provide an opportunity for the GRN and its DCPs to discuss sectoral strategies and programmes; (ii) to solicit funding beyond that contemplated in NDP2 in order to tackle key priority issues; and (iii) to request the DCPs to take note of Namibia’s development status when considering development assistance, with a view to enabling Namibia to access concessional financing. It is mainly Germany and the EU that provide support to the agricultural and rural sector while support by other donors has been modest. Other organizations like the FAO implemented agricultural projects funded by the GRN. Unlike other countries in the region, Namibia has strategically decided to limit development assistance from the World Bank.

I.59. Federal Republic of Germany. The German Technical Cooperation Agency (GTZ), has since 1992 supported the Sustainable Animal and Range Development Programme (SARDEP), which aims to assist farming communities in identifying, developing, testing and implementing area–specific and appropriate strategies for improved animal production and rangeland utilization. SARDEP was completed in 2004. GTZ has also provided considerable assistance in the natural resource sector as in water resource management, biodiversity, combating desertification and land use planning. In the Service Delivery Promotion Project, it has focused on capacity building to improve the Local Authorities’ service delivery capacity and prepare them to receive decentralized functions. The Germany government is also providing support for the process of developing appropriate and socially acceptable land reform systems. The KfW Development Bank, on behalf of the its government, has funded the construction, through labour based methods, of new gravel roads and the upgrading of existing gravel roads to bitumen faced in the regions of Ohangwena, Oshikoto, Oshana, Omusati and Caprivi. German assistance has been in accordance with GRN policy and consistent with pillars 1 and 2 of CAADP. In future, the German government intends to support SMEs (CAADP pillar 2). Future investments of the KfW in the roads sector will only be to sections that have been identified as a priority in the respective regional Roads Master Plan, or economically efficient, or of particular importance in alleviation, or contributing to the improvement of the living conditions of the local population by improving access to essential services, or located as a priority in areas defined as underprovided (pillar 2). The German government has been supporting the implementation of an ecologically, economically and socially acceptable land reform programme by providing the necessary infrastructure, micro–credit and post settlement support primarily in commercial freehold areas but also in unused and underutilized communal areas (GRN policy and CAADP pillars 1 and 2).

I.60. European Union (EU). Starting in 2002, the EU has been supporting a National Agricultural Support Services Programme (NASSP) with a budget of €6m over three years. NASSP has five components: capacity building in marketing; rural enterprise development and finance; livestock development; crop diversification and sustainable exploitation of indigenous plant resources; and mahangu (pearl millet) development. The EU has also been funding a management–training programme intended to support the capacity building for land administration in MLRR. The pillars of CAADP covered by these initiatives include 1, 2, 3 and 5. With an allocation of €15m in its Rural Development and Poverty Reduction (RD&PR) programme, the EU intends to support decentralized demand driven actions on Community Based Natural Resources Management (CBNRM) support services, SMEs, Community Based Management (CBM) tourism initiatives and access to credit/capital innovative initiatives. It is proposed that the EU support focusing on resettlement on communal lands will be closely coordinated with Germany in the design and delivery of that support. The support in communal areas will not only consider infrastructure provision (roads and water), but place emphasis on post resettlement training, capacity building and the provision of extension and financial services to the newly settled farmers. The 9th European Development Fund (EDF) programme will be


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implemented during NDP3 with projects that are relevant to promoting employment and income generation, relevant to improved access to resources and with those that will improve rural services (CAADP pillars 1, 2, 3 and 5). In addition to its ongoing support to Namibia under the 8th EDF, the European Commission (EC) has allocated a financial envelope for NDP2 programme implementation to support rural development, including the land issue and human resource development as the focal sector (pillars 1 and 2). HIV/AIDS is supported as a cross cutting issue while capacity building, trade and regional integration are non–focal sectors. EC also assists Namibia through its annual budget line support to NGO initiatives in a number of areas such as HIV/AIDS, environment, gender and rural poverty reduction through grassroots organizations (pillar 2).

I.61. Food and Agriculture Organization of the United Nations (FAO). The seven on–going projects (total cost US$6.9m) in Namibia under the theme Food Security and Poverty Reduction are funded by the GRN and implemented by the FAO. The areas of support include crop production and processing, training and research interventions, urban and peri–urban horticulture development, formulation of legislation and information management systems and for the Food Security and Nutrition Programme (pillars 2, 3, 4 and 5).

I.62. Other countries (e.g. Sweden and Luxembourg) have supported programmes aimed at enhancing economic and social equity and contributing to the sustainable use of natural resources and the protection of the environment among the rural poor and, in particular, with regard to the resettlement and decentralisation processes.

(iv) Lessons Learnt

I.63. The analysis presented in the previous sections of this document points to the following lessons:

• Focusing development initiatives in the poor rural countryside is a sure way of redressing the inequalities of the past;

• The GRN has singularly or in partnership with the donor community successfully financed major agricultural and rural development projects, which have enhanced its credibility for assistance;

• Namibia is open to investment in accordance with its priorities and policies, which are geared towards sectors, which stimulate economic growth;

• Community involvement is now an accepted strategy for initiating and implementing development projects;

• For maximum impact, projects and interventions in the agricultural and rural development sector should be planned with involvement of regional authorities;

• The national debt is kept low through strategic borrowing and sound fiscal and economic management policies;

• Potential areas of duplication in rural development can be minimized through a coordinated approach in implementation of programmes and projects;

• Development of local markets and market infrastructure needs to be given priority especially in the formally disadvantaged northern communal areas of the country.


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(v) Conclusions

I.64. The government and donors are committed to addressing the inequality in distribution of income and assets that has existed in Namibia since Independence. To that end, they have shifted priorities and resources to supporting programmes in areas where the majority of the rural poor reside. The areas below could be enhanced through the CAADP facility:

• The empowerment and involvement of communities in development initiatives, agricultural services delivery and drought mitigation efforts are intended to contribute to improved livelihoods, employment creation as well as reduced government expenditure;

• Crop diversification to non–traditional crops such as sweet potatoes, cotton, oriental tobacco, dates and grapes is a strategic move away from depending on South African imports to expanding the agricultural production base and creating local and export market opportunities;

• The Farming Systems Research and Extension (FSRE) approach has the potential to bring innovations, and new technologies to communal farmers to enable them become surplus crop and livestock producers and contribute more effectively to the export market;

• The policy of decentralization is an appropriate model for developing the rural areas of Namibia. Support for decentralization is being promoted by way of training either within government ministries or in the regions;

• Infrastructure development is also a major objective of government. More could be done to harness surplus water including that from the annual flooding of the river Zambezi. Similarly, the construction of labour–based rural roads is crucial to opening up Namibia’s interior so that communal farmers can access domestic as well as foreign markets.

II. CONSTRAINTS AND OPPORTUNITIES

A. Macro–economic

II.1. Constraints: The advantage of being a net exporter of agricultural commodities and specially meat faces the risk of being eroded because of regional and international integration efforts. Occurrence, however infrequent, of CBPP and FMD in the north of the country is a major constraint to export market expansion. Namibia is limited in human, institutional and infrastructural capacities to value add to its agricultural products. Current markets are restricted to a few countries and therefore exports are vulnerable to shocks. In addition there is little development of national markets. Poor availability of finance for emerging farmers, especially in the livestock sub–sector has reduced the competitiveness of such farmers.

II.2. Opportunities: Government is committed to being competitive in the international markets through maintaining beef quality standards. Currently the country only supplies an estimated 70 percent of its EU beef quota meaning the potential for diversifying markets exists. Livestock owners in communal areas stand to benefit from export expansion once they oblige to international market requirements and can bring both large and small stock to a marketable condition before sale. There are opportunities for increasing the exports of grapes and dates because they are of high quality and are produced out of season. Modern infrastructure such as in the Walvis Bay port and the Trans–Kalahari highway is beneficial for exports. EPZs have a role in poverty reduction because of the employment


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opportunities they offer to local residents. The Agricultural (Communal) Land Act has made it attractive to invest in land improvement and agriculture. Overall, there is a sound macro economic management system in place.

B. Natural Resource/Environmental

II.3. Constraints: The land available for crop agriculture is limited and vast tracks of grazing land are unutilized due to lack of water. The rapid increase in livestock numbers is a threat to the natural resources base and desertification can easily be enhanced unless properly managed. Drought is a common feature of Namibia’s agriculture and farmers frequently lose entire crops because of drought. Wild fires destroy large tracts of grazing land and forests during the peak of the dry season. Lack of preparedness on the part of communities and support organizations to combat incidences of wild fire is a constraint that requires addressing. Bush encroachment has resulted in the disappearance of annuals of palatable species, which are replaced by invasive bushes and shrubs of poor nutritive value.

II.4. Opportunities: The MAWF is encouraging production systems that are compatible with preservation of the natural resources. There is strong donor interest in natural resource conservation and management. Four of the five perennial rivers of Namibia are located in the densely populated north and can be used for the development of irrigated agriculture which currently is limited to only farms run by the Namibian Development Corporation (NDC). Moreover, low–cost technology for water conservation and efficient irrigation techniques are available. Government is promoting community–based natural resource management through development of conservancy schemes and the promotion of community forests. There are also programmes in agriculture, environment and forestry aimed at rehabilitation of range resources. An early warning system is being refined to increase the preparedness of farmers in mitigating unfavourable environmental effects. There are new electrical methods for converting sea water into potable water.

C. Crop Production

II.5. Constraints: Crop production is still traditional and crop yields are currently very low due to low level of technology uptake. Crops are grown without fertilizer or manure inputs and there is lack of knowledge about what to grow in a particular environment. Marketing infrastructure including crop storage facilities is underdeveloped. Water availability is limited throughout Namibia and is a serious constraint to the development of crop agriculture. Issues of equity and equal opportunities to credit and other support services are important for further development and diversification of agricultural production. The high cost and unavailability of productive commercial farms has reduced the pace of resettling landless people and enabling them to contribute to agricultural production.

II.6. Opportunities: The Green Scheme initiative of the MAWRD envisages the development of irrigation–based crop production to which an indicative sum of N$3.8bn has been earmarked over the next 15 years. Agricultural productivity can easily be increased through application of developed and successfully proven technologies. Development of rural roads and other infrastructure will improve market access. The Meat and Agronomic Boards are well suited for commodity marketing. Diversification into high value crops such as flowers would make the use of water cost effective. Success with dates, table grapes and other high value crops points to the potential that the crop sub–sector holds for transforming Namibia’s agriculture. There is potential in NGOs and cooperatives promoting savings and providing credit facilities to communal farmers. More land will now be acquired following the increased annual allocation for land purchases. Donor support on the land reform process is encouraging.


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D. Livestock Production

II.7. Constraints: Farmers’ traditional ways of production are entrenched and slow to change. Pastures are often overgrazed because of concentration of too many people and their livestock in small marginal lands. Unless curbed, the rapid increase in livestock numbers will lead to environmental degradation and endanger the very source of survival of rural people. Bush encroachment has become a menace to livestock farming throughout the country. Drought and wild fires frequently reduce grazing and lead to loss of livestock due to starvation to death of many animals. Restocking of herds after losses due to drought or wild fires is a constraint to sustainable livestock production.

II.8. Opportunities: Peoples’ attitudes and perceptions can be changed so as to make livestock productivity more important than livestock numbers. Innovative methods of sustainable range management and, therefore, bush control are available and being encouraged. Labour intensive methods of bush control have the potential for employment creation. There are unutilized communal grazing lands in the relatively uninhabited and remote areas in the north of the country which could be resettled and exploited if the required infrastructure of water points and veterinary health care is developed. Disease control campaigns are efficient. Veterinary services are being decentralized and community animal health care and drug retailing privatized. The superior attributes of indigenous breeds, common in communal areas, can be translated into marketable commodities that will boost the economic welfare of the people in these areas. Any livestock production–related interventions should be linked to increased off–take rates. Thus, increased marketing of livestock can be promoted through provision of market information to rural communities on a regular basis and support for the construction of marketing infrastructures in strategic locations.

E. Marine and Inland Fisheries and Aquaculture

II.9. Constraints: Monitoring and surveillance of marine resources in Namibia’s coastal waters is costly. Illegal fishing, particularly, by foreign vessels has contributed to decline of fish and other marine resources. The national market for fish and fish products is limited.

II.10. Opportunities: Namibia will continue to produce good quality fish because there are measures primed to protect the coastal environments. Sustainable development of the fisheries sub–sector requires training of more fisheries professionals and technicians. Enforcement of the quota system on annual catches of main fish species will sustain the industry. Stakeholders in the industry are committed to maintaining overseas markets by conforming to international standards of processing. Government recognizes the potential role of aquaculture in rural development. The passing of the aqua–culture bill provides the legal framework for the development of the industry.

F. Institutional

II.11. Constraints: Many parts of communal areas still lack extension services, veterinary support and adequate water supply; agricultural development potential is not fully tapped. Available agricultural credit schemes and institutions are not accessible by resource poor farmers. Commercial banks operate rigid risk policies and insist on 100 percent collateral before lending to entrepreneurs and SMEs. Government operations are excessively centralized with regard to planning and implementation of programmes. Activities in rural areas are carried out by many government agencies, the private sector and donor countries, which result in overlap and the ineffective use of scarce resources.


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II.12. Opportunities: There is a need for coordinated development initiatives among stakeholders. The MAWF is prepared to lead in clarifying the mandates of role players by developing a policy on rural development. Participatory planning mechanisms at regional level are seen as crucial to removing duplication of activities. A comprehensive rural finance strategy suited to meet the needs of the very poor must be developed. Calls for a financial charter that addresses issues such as ownership, participation in management and access to financial services by previously disadvantaged persons have been made. Government is committed to the decentralization process. All concerned strongly favour community driven development.

G. Conclusions

II.13. Food security has long been a major objective of government in which it has also invested heavily. The Food Security and Nutrition Project, established across line ministries, has achieved, among others, the development of a Food Security and Vulnerability Information and Mapping Systems (FIVIMS) for Namibia, which has been approved by Government and which will facilitate the formulation of appropriate food security policies, development programmes and emergency interventions. Capacity constraints for the implementation of FIVIMS need overcoming.

II.14. The GRN is committed to ensuring that farmers have access to clean water for themselves, their livestock and for small– and large–scale irrigation purposes. While the long–term intention is to tap resources from neighbouring countries, water catchments particularly in the communal areas need developing to harvest rain water; water from mountain springs could be dammed and the annual flooding of the Zambezi needs harnessing to provide both consumptive and irrigation water.

II.15. The building of access roads as well as improvement in communication systems are essential to enable extension and veterinary services reach out to communities in remote areas and promote the adoption of improved agricultural technologies and practices for increased crop and animal production.

II.16. The promotion and monitoring of animal health and the control and prevention of diseases require that veterinary facilities (clinics, crush pens for vaccination and treatment) are available in settlements with large livestock populations and that surveillance along international borders is secured with the cooperation of neighbouring countries.

II.17. Crop diversification including the cultivation and commercialization of indigenous plants has the potential to improve the economic base by expanding the agricultural sector but is highly constrained by lack of water. Fortunately, the water resources of the four perennial rivers in the north of the country are not fully tapped and the Green Scheme, boosted by a start up allocation of a N$2 million in this year’s budget, is targeting these waters for the irrigated farming of high value crops with spin offs in job opportunities.

II.18. Correct range management and an efficient animal health delivery system will lead to increased animal numbers, which will require increased off–take through regular auctions and meat retailing. Similarly, increased irrigation capacity will lead to surplus crop production, which in turn will require market access for it to be sustainable. Therefore, development of market infrastructure (auction kraals, storage facilities, quarantine camps with feedlots, transportation facilities, etc.) and strengthening of international negotiating capabilities are prerequisites that will ensure that Namibia’s agricultural products are sold efficiently and profitably domestically and also enjoy access to preferential markets internationally.


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III. INVESTMENT PROGRAMME OUTLINE

A. Priority Setting

III.1. The PSIP was developed through a consultative process over a 3–year period. For NDP1, consultants for ministries and regions in this regard helped prepare the initial documents, which were then reviewed by ministerial and inter–ministerial technical committees before being finalized in a series of workshops. In the NDP2, the agricultural sector review of the PSIP was undertaken by staff from the MAWF before submission to the National Planning Commission (NPC) for consolidation with those of other sectors.

III.2. The PSIP is a list of programmes and projects that require funding and in the agricultural sector these are not in order of priority. Any priority areas of investment should take into account current investment requirement plans of government and the agricultural sector’s overall goal of improving food security and creating employment opportunities. The list of priorities below has been rationalised after the Stakeholders’ NMTIP Validation Workshop of February 2–3, 2005.

III.3. Priority 1: Crops, Livestock and Fisheries Production and Diversification for Food Security (All CAADP Pillars). The livestock sub–sector is the dominant in agriculture and government has, since Independence, emphasised the relevance and importance of investing in this area. The Northern Regions Livestock Development Project (NOLIDEP) was conceived by government and supported by donors to improve the economic and social well–being of the rural population in the Northern Communal Areas (NCAs) through promoting increased livestock production, greater productivity and off–take, while ensuring the development of a sustainable range management system. The project was completed in September, 2004, but government has found grounds for a follow–up project that would address, in addition to livestock, other sectors that affect the livelihoods of the rural poor. The documents for the successor project have been completed. Crop diversification is also a way of expanding the economic base and reducing imports and has been targeted for investment through the irrigation development framework called the Green Scheme. Increased productivity of both crops and livestock can benefit from improved technologies developed through research and extended to farmers. In the NDP2 period, government has made an investment plan for N$146m and N$107m in support of crop and livestock production and FSRE respectively. In fisheries, the opportunities for developing aquaculture are considerable in the north and south of the country.

III.4. While on a national level, Namibia has the capacity to import what it does not grow, food shortages do occur at household level. This makes food security a number one priority for investment. It has been since Independence and in the NDP2 support to food security has the highest investment requirement of N$302m. The government has been supporting major programmes like the Drought Relief Programme, Food/Cash for Work Programme and the Youth Employment Scheme, which are all aimed at providing employment opportunities and ensuring food security and nutrition at the household level. Donor support for reducing food insecurity is outlined in the Food Security and Nutrition Project (FAO) and in NOLIDEP (IFAD, France, Luxembourg, and Belgium). Demand driven income generating activities, mainly carried out by women, are central to both projects. Other projects like TeleFood implemented by FAO also have food security and poverty reduction as the underlying theme. Although some successes have been attained on the food security front, the demand for support on the ground is large.

III.5. Priority 2: Rural Infrastructure Development (CAADP Pillars 1 and 2). Long years of neglect have made it difficult for the majority of people who live in the rural areas of Namibia to participate effectively in the economic life of the country. The constraint here is mainly poor road


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infrastructure and limited water supply for both humans and livestock. In the NDP2, government proposes to spend about N$230 million to improve rural infrastructure and trade–related capacities in order to increase market access and N$138 million in establishing and extending rural water supply. Donor interest in rural development has matched that of government and countries like Germany and Sweden have been active in access road construction and water development for livestock.

III.6. Priority 3: Agriculture Finance and Marketing Infrastructure (CAADP Pillar 2). About 76 percent of the households in Namibia live under the poverty line (FAO, 2001). The need to detach from poverty is enormous but there are no finances to support investment initiatives because of the stringent requirements of commercial banks. It is hoped that free trade agreements with other economic regions will introduce the element of competition and open up financial markets. Although government has seen it necessary to invest in supporting individuals or groups to access credit through the Agriculture and Micro Financing Scheme which has an investment requirement of about N$183m in NDP2. Although the EU has consistently supported trade related capacities, donor interest in this regard could be stimulated through NGOs.

III.7. Priority 4: Natural Resource Conservation and Management (CAADP Pillars 1 and 5). Sustainable use of renewable natural resources and the maintenance of essential ecological processes, biodiversity and ecosystems are critical in the wildlife and forest corridors and zones of northern Namibia. These habitats have high value in tourism, hunting and wildlife production. Valuable wildlife species (e.g. Roan, Sable) if properly managed, can significantly contribute to income generation of communities, especially those already organized into conservancies. In some conservancies, earnings in excess of N$1m annually have been registered through trophy hunting concessions.

B. Selection Criteria for Bankable Projects

III.8. Government priority. A bankable project should preferably be in an area that has already been identified by government or one in which government alone or supported by donors is already working in but lacks the resources to meet specific components of the identified demand. Earlier sections of this paper have highlighted government thrust and donor interest, which is to improve household food security and reduce poverty in the poor rural areas of Namibia.

III.9. Technical feasibility and sustainability. The principle of comparative advantage should be employed to ensure that projects are located where environmental suitability and resource availability will allow for maximisation of productivity. Both the Food Security and Nutrition Project and NOLIDEP, among others, made progress in community mobilisation, group formation, group organisation and training which makes future investments in these areas technically feasible. The project must bestow from early on a sense of community ownership and must allow for the evolution of resource management techniques that are community led to make it sustainable. The project should be one that will not impact negatively on the environment but rather contribute to its improvement or sustenance.

III.10. Institutional arrangements. A bankable investment project should be small enough (US$3m) to be managed properly but big enough (US$10–15m) to produce a multiplier effect in terms of economic benefits to community members. Business needs to be conducted transparently and management must be accountable to its members. Membership must be voluntary with a strict code of conduct. The principle of community contributions in cash and kind should be included as a strategic prerequisite for co–financing projects activities.


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III.11. Absorptive capacity. The technologies proposed in the bankable project must be ones that are familiar to the implementing agency, which must in turn have the necessary manpower capacity with responsibility, clearly defined. For efficiency of resource use, implementation should be included as part of normal workload for existing staff so as not to create unnecessary time lags in implementation.

III.12. Financial and economic feasibility. The economic viability of the project must be judged by the extent to which it will contribute positively to community livelihoods including food security, employment and income generation. In other words, it is important to carry out economic and financial analyses as in cost benefit ratios, pay back period and wherever possible calculate an internal rate of return to investment. Indicative crop budgets can suggest whether a particular technical process is financially viable in the current pricing and marketing context. For example, in an irrigation project, it would be necessary to indicate investment costs per ha vis–à–vis the returns from the crops to be grown. As far as possible, advantage should be taken of existing decision criteria for formulation of bankable projects used by such government departments such as the NPC.

C. Identification of Projects for Development with FAO Assistance

III.13. Inputs by stakeholders during the Stakeholders’ NMTIP Validation Workshop of February 2–3, 2005 indicated that viable projects could be developed in the following six areas which were further elaborated into Bankable Investment Project Profiles (they are presented under separate cover as Volumes II to VII):

• “Infrastructure Upgrade of Rural Water Supply”: Construction of boreholes and associated network of pipelines in areas where there is sufficient good quality underground water would ensure that households have access to clean water for livestock and humans. The containment of run off rainwater in earth dams is of particular interest in the Kunene region and would require construction of such dams and associated pipelines for relaying water to outlying areas of demand. Similarly, water from mountain springs could be made more accessible to surrounding communities through securing the sources of water, improving the flow channels and constructing storage tanks.

• “Support to Smallholder Irrigation Schemes”: Irrigation projects aimed at utilizing the waters of the four perennial rivers in the north of the country for the production of high value crops and including food crops such as maize. It would fit well into the broad objective of the Green Scheme and needs to be planned under existing agreements on water use with neighbouring countries. The production of maize, from example, would be justified on the basis of the large volume of about 141 000 tonnes of cereals that Namibia imports every year and which should be reduced to between 10 and 20 percent. Suitable crop producers would need to be recruited, supplied with inputs and guaranteed markets. Associated with such a project is the need to build storage facilities such as silos to hold the national grain reserves and cold rooms for perishable products.

• “Development of Infrastructure for Marketing Horticultural Produce”: Development of a marketing infrastructure for perishable products like fruit, vegetables and meat would encourage potential farmers to engage in food production for profit. Such infrastructure should include the construction of rural cold facilities for horticultural and livestock products and be coupled with capacity building in marketing skills. A project such as this would fit well into the broad objective of the National Horticultural Development Initiative and promote livestock marketing.


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• “Integrated Farming Support Programme for Resettled Farmers”: Rural communities can generate income and promote the sustainable use of renewable natural resources by investing in wildlife for tourism, hunting, meat, hides and sale of animals. In some conservancies, earnings in excess of N$1m annually have been registered through trophy hunting concessions.

• “Livestock Improvement”: Livestock improvement in the north of Namibia by improving management practices, controlling diseases and increasing offtake through informed marketing. This would increase income of communal farmers and help sustain utilization of the range.

• “Support to Aquaculture Development”: Investment in fish farming is in line with government thinking. Community–based intensive freshwater aquaculture using local species such as catfish and tilapia offers possibilities for promoting food security, providing socio–economic benefits to Namibians and has the potential to increase foreign exchange earnings through exports.

IV. FINANCING GAP

IV.1. At the Maputo Summit of July 2003, African Heads of State and Government pledged themselves to commit “...allocating at least 10 percent of national budgetary resources for the implementation of CAADP… and sound policies for the agriculture and rural development within five years, i.e. by July 2008. Namibia is striving to reach this target within the next five years. However, because it is difficult to differentiate between domestic and external funding, the 10 percent is defined as the amount of the national budget, including domestically–funded (“revenue account”), hard and soft loan–funded, and grant–funded resources (“development account”), allocated to the agriculture and rural development.” In essence, the “financing gap” herein reflects the shortfalls in projected budgetary allocation to the sector vis–à–vis the 10 percent target.

IV.2. The total public resources allocated to agricultural and rural development comprise the budgets of MAWF, MFMR and MLRR as well as the budgets of other ministries for activities related to agriculture and rural development. However, for this purpose only the budgets of MAWF, MFMR and MLRR and part of the capital estimates of the following Ministries: MET, MTI, MRLGH and MWTC have been included. Estimation of the resources required to reach the target of 10 percent is given in tables below. Existing projections of government expenditure as contained in the Budget Statements (GRN, 2004) only exist up to 2006/07 (i.e. for the next two financial years). These projections are not only at the broader category level of recurrent and capital but do also show sector or ministry allocations. For the year thereafter (i.e. 2007/08) the targeted 10 percent projection is assumed to be reached at that time. The row “percent Requirements” should gradually increase to become 10 percent in 2007/08. The row “percent Agricultural Programme Requirement” will then be the above percentage of the total budget. The Gap will then be the difference between the agricultural programme requirement and the agricultural programme forecast.


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Table 8: Agricultural Sector Financing Gap Item (amounts in N$ million) 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 Agricultural Programme Requirement 915 1,172 1,289 1,350 1,480 – MAWF budget (1) 428 453 580 650 748 – MFMR (2) 95 99 132 142 153 – MLRR (3) 56 57 132 137 144 – MET (4) 71 72 73 74 75 – MIT (5) 7 7 7 7 7 – MRLGH (6) 75 76 93 122 190 – MWTC (7) 146 150 155 157 163

Agricultural Programme Forecast 878 915 1,172 1,289 1,480 Gap 37 117 117 61 – Total Budget 12,690 12,474 12,978 13,000 13,100 % Agric. Requirements 7 7 9 10 11 Source: Computed from GRN Budget Statement 2004–2005: Ministry of Finance. (1) 100 percent of the MAWF is expended on agriculture and rural development. (2) 100 percent of the MFMR is expended on agriculture and rural development. (3) 100 percent of the MLRR budget on agriculture and rural development. (4) It is assumed that only 50 percent of the MET budget is the portion expended on agriculture and rural development. (5) Only 10 percent of the MIT budget is assumed to be expended on agriculture and rural development. (6) Only 20 percent of the MRLGH budget is assumed to be expended on agriculture and rural development. (7) Only 50 percent of the MWTC budget is assumed to be expended on agriculture and rural development.

V. MONITORING AND EVALUATION

V.1. In 1996, government published a national Monitoring, Evaluation and Progress Reporting (MEPR) System with the overall objective of providing planners and management adequate information on the progress being realised during the implementation of planned programmes and projects. The system has units at the national level (The National Planning Commission Secretariat); the sectoral level (line ministries); the regional administration (local) level and the programme/project level. All units are to monitor and evaluate project implementation and report progressively from the project level to the national level.

V.2. There are 35 Performance Indicators or Targets for measuring progress in achieving the objectives set for the agriculture sector during the five year NDP2 period. The mid term review of the agriculture sector has concluded that some targets should be redefined while others are to be abandoned altogether because they do not conform to the basic principles of target definition.

V.3. In its Strategic Plan 2001–2006, the MAWRD intends to establish mechanisms for monitoring and evaluating sector achievements. The same framework should be employed to monitor the NMTIP using targets that are practically measurable. There should be databases that will track physical and financial progress and impact of the NMTIP activities. The framework should also be used to identify needs for changing direction or adjusting strategies and to provide a basis for a cost benefit analysis. In any case periodic reports about progress, preferably quarterly, would be desired to inform all stakeholders including DCPs. This will ensure that targets are maintained and outputs are delivered. A mid term review would only be necessary if there are indications that the programme is not proceeding as per plan. Otherwise it would suffice to carry out an evaluation and a financial audit at the end of the programme by an independent consultant. Monitoring will be against verifiable indicators to be identified in a logical framework.


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V.4. The following would be useful indicators to consider:

• number of irrigation plots established;

• incidence of critical livestock and poultry diseases;

• km of gravel roads built;

• km of rural roads asphalted;

• km of water pipes laid out;

• number of people with access to credit;

• yield of different crops per ha;

• number of boreholes/dams constructed; and

• km of water canals built or rehabilitated.

Documents

GOVERNMENT OF THE REPUBLIC OF NAMIBIA